The countries that are forecast to see positive growth as it relates to construction activity include Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Ireland, Latvia, Lithuania, Romania, Slovakia, Slovenia, Turkey & the Ukraine. All of these countries are projected to experience GDP growth of between 2% & 3.5% for the remainder of 2019. Poland is performing remarkably well with a current GDP of between 4.1% & 4.3%, inflation is currently forecast to be in the 2.6% to 2.9% range, and Poland’s unemployment rate currently stands at 5.1%.

The countries that are projected to see minimal or no growth as it relates to construction activity include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherland’s, Norway, Portugal, Spain, Sweden, Switzerland & the UK. All of these countries are projected to experience GDP growth less than 1.5% for the remainder of 2019.

Construction activity is showing signs of a slowdown in most of the major Western European economies. Britain, Germany & France continue to experience slowdowns in the construction markets, Poland is the one European country that is experiencing growth.

The UK construction sector continues to struggle as we move into 2020. Brexit is the main cause for the UK’s economic slowdown. Will the new British Prime Minister Boris Johnson be able to make Brexit happen is the question…… stay tuned a lot could happen in the next month or two. The difficulty of forecasting how European Union construction materials & labor costs will adjust in a post Brexit scenario are very difficult to forecast.

The UK’s Brexit political crisis has become progressively worse in the last three months. The UK is set to drop from its # 5 ranking to # 7 of the words largest economies rankings. Brexit in many ways is the direct cause of this demotion. Brexit negotiations are still in a state of flux, more than three years after the UK’s referendum, this economic uncertainty is expected to have a negative impact on construction activity for the remainder of 2019. The economic impact & uncertainty of Brexit continues to impact the UK, the Pound Sterling has dropped more than 15% against the US Dollar in the last two years, currently trading at $1.23 to the US $ (9/26/2019), the UK economy & its construction sector continues to weaken.

The UK GDP is forecast to grow to 1.3% range for the remainder of 2019, the unemployment rate is moving down slightly, the current rate is 3.8%, & construction unemployment is higher in the 5.4% to 6.5%. Inflation is projected to be in the 1.6% to 1.9% range by the end of 2019.

The German economy is not performing well, the ongoing Brexit stalemate, the continuing U.S. / China trade disagreement & the possibility of future US tariffs on German imported automobiles are issues that are suppressing future construction growth.

The German construction sector remains very weak going into the 4th Q of 2019, however there is activity related to a number of infrastructure and transportation projects. Germany continues to be the #1 country & largest economy in the European Union, if Germany catches a cold then you can assume that the rest of Europe will be sneezing. Unfortunately, however as we move further into 2019 the German economy is not performing to its full potential, minimal growth appears to be on the cards for Germany for the rest of the 2019 and possibly 2020.

The German inflation rate is forecast to be 1.4% to 1.7% for the remainder of 2019. The German GDP continues to be low at 0.4% to 0.7% for the remainder of 2019. The German overall industry unemployment rate is forecast to be 3.2%, the construction industry is somewhat higher ranging between 5.2% & 5.6%. Germany is planning to de-commission a number of coal & nuclear power plants in the next 10 years, look for an increase in wind, solar & gas fire power facilities to take the place of these de-commissioned facilities.

France donors have promised more than 1 billion euros to repair / rebuild Notre Dame Cathedral that was badly damaged by fire in mid-April, the repair effort could take (7) years. France continues to have “yellow vest” protests in Paris & many cities around the country, these protests have been going on for the last six months & look like they will continue for the next couple of months.

These protest of course are impacting the overall French economy. French inflation rate is forecast to be 1.1% to 1.3% for the rest of 2019. The French GDP continues to be extremely low at 1.3% to 1.5% for the remainder of 2019.

France’s overall industry unemployment rate is forecast to be 8.5% for the balance of 2019, the construction industry is somewhat higher ranging between 10% & 12%. The construction sector continues to experience minimal growth; there are number of major infrastructure / transportation projects in the pipeline, but nothing to get that excited about.

The Irish construction sector is seeing increased activity going into the 4th Q of 2019, the only issue that could seriously impact this situation is an impasse on Brexit.

The majority of countries in Western & Eastern European will continue to experience a contraction of the construction sectors in 2019, Brexit, the ongoing Ukraine standoff with Russia, concerns about future possible US protectionism focused on German automobiles will be the some of the reasons for this situation.

2019 Global Construction Costs Yearbook

Compass International's 500+ page publication provides “current” detailed information on construction cost specific to 101 countries worldwide.

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